Marc Lichtenfeld has an ad running this week that talks about a business that could be the “most profitable I’ve ever seen” — and one that’s so entrenched in our country that he says the equivalent of 10% of US GDP relies on this one company.
So who is it? Well, he gets into some clues and makes it fairly clear, for an enterprising sleuth, which stock it is… but then he throws a bit of a curveball, saying that he’s got a secret way to earn income from this stock — a stock that doesn’t pay a dividend. And he says he won’t be using options or bonds or anything else income-y.
So there, intrepid Gumshoe readers, is our mystery — let’s solve it, shall we? For those who are keeping track (like us), the ad this time around is for the Oxford Income Letter ($49 first year, $79 renewals).
We’ll start with part one, which is identifying the “most profitable business” Lichtenfeld has ever seen… this is the lead-in to the ad:
“The Company That Gets Paid 2,300 Times per Second
“This business could be the most profitable I’ve ever seen.
“But you can’t collect a cent of income from it… unless you follow the exact instructions below well before January 1.
“I’m going to tell you about a single company that might just have the most profitable – and unusual – business I’ve ever seen.
“It doesn’t need retail stores.
“It doesn’t need to manufacture physical products.
“And you’ll never pay it a cent from your bank account.
“Yet, it’s found a way to collect money during every second of every day.”
So what is the business of this mysterious company? More clues:
“Safest Stream of CASH in the World
“First of all, this company controls the largest share of what is perhaps the largest market in the United States…
“Retail stores… gas stations… movie theaters… online sites… electronics… grocery stores… restaurants.
“Anytime a transaction occurs at any of these places, this company makes money….
“… it does this by collecting a small fee from the one thing that virtually every person in America and most people around the world use every day…
And it’s not one of the big credit card networks, or the banks who issue cards — it’s one of the “middlemen” in the payment processing business:
“… this company operates like a tollbooth: It helps facilitate the money distribution and, in return, it collects a small fee on every little transaction.
“You can see why our entire economy depends on the company I’m talking about today…
“While Visa, MasterCard, Discover and American Express fight for their portions of the market… this little company dominates this second part of all credit card transactions.Are you getting our free Daily Update
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“The company gets paid on 74 billion transactions per year.
“It holds a near-monopoly on the entire electronic financial system. Banks and credit card companies MUST use this company’s technology.
“It controls nearly half of all electronic transactions… That includes 80% of ALL gas and grocery payments.”
So you’ve probably got an idea of who this is… particularly if you noticed the little bit about the fact that this is actually a recent IPO…
“With that much cash coming in, you’d think it was an old blue-chip stock.
“Quite the opposite, actually.
“The company just went public on October 15, 2015.
“It was the biggest IPO since Facebook… It was the biggest IPO of 2015… Yet it went public with almost no fanfare.”
So yes, he’s talking about the big payment processing company that went public in a private equity-backed IPO a couple weeks ago: First Data (FDC)
First Data was a big IPO on October 15, though the size of the IPO was nothing compared to the size of the go-private transaction when it was taken over by a private equity fund in a huge leveraged buyout almost ten years ago. But, as Lichtenfeld says, it’s a big company and a large and fairly stable business — but it doesn’t pay a dividend or generate income for you directly… so how is he getting you a “payout” from this company?
That’s part two of the tease: the “backdoor” way to earn income from this stock:
“I’m frustrated because regular investors can’t collect a dividend from this company.
“Not one cent.
“And since I’ve built my reputation on enhancing my readers’ incomes, I can’t recommend it.
“To me, it’s like finding a winning lottery ticket… and being told, ‘No, you can’t claim it.’
“Most people would have given up after finding this out.
“But not me…
“I’ve found a backdoor way to get MASSIVE income from this stock.
“I’m talking about income checks as high as $1,888… $4,720… even $9,400.
“Yet it doesn’t require options, bonds or any other less traditional income sources.
“Rather, there is a way to get special dividends – and even bigger capital gains – from one of the best businesses in America.
“But the window of opportunity could close for good as early as January 1.”
So have you guessed that backdoor yet? Here’s a bit more:
“Only about 18% of the company went public.
“You see, the rest of the company is in the hands of the lucky few who already hold private shares.
“These are the people collecting the big income payouts.
“They are selling a portion of the company because even that small amount will make them billions in cash returns.”
So what’s Lichtenfeld teasing here? Thinkolator sez he’s recommending: KKR (KKR)
Which, you may have guessed by now, is the company that set up the big leveraged buyout of First Data back in 2006, and probably the one most eager to finally “monetize” that investment with the IPO this year. KKR used to be known as Kohlberg Kravis Roberts, back in the days when they were the “Barbarians at the Gate” with their biggest ever (at that time) leveraged buyout of RJR Nabisco, and they are an investment management company specializing in private equity and leveraged buyouts, using both their own capital and the money they manage for (mostly institutional) investors.
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